Statute of Limitations for Michigan and IRS to Collect Tax Debts

The Many Limits of Tax Statute of Limitations

All things must process in a timely manner when it comes to the IRS and taxes. For this purpose, the tax code has imposed a set of laws, known as the tax Statute of Limitations (SOL). Under this, there are certain time limits on different tax-related actions that you and the IRS can take. This depends on a number of factors. Here’s some advice from our Michigan Tax lawyer, Venar R. Ayar on significant information to keep in mind when it comes to the statute of limitations.

Tax Statutes of Limitations Key Notes

When claiming a refund, the tax statute of limitations expires three years from the due date of the return, even if you file before the due date. Filing an extension may extend the period for claiming refunds. As soon as the refund expires, you cannot get it back.

For the IRS to examine or audit your tax return, make changes or assess any additional tax liabilities, the SOL is three years from the due date of the return or the day you actually filed your return, whichever is later.

If you fail to file a return, file a false or fraudulent return or are willfully attempting to evade tax, the statute of limitations doesn’t exist at all. In these types of cases, the tax may be assessed or collected at any time.

As For Tax Statute of Limitations & Collections

The IRS has 10 years to collect outstanding tax liabilities. This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a few ways. It could be a balance due on a tax return, an assessment from an audit, or a proposed assessment that has become final. The IRS may then declare 10 years to collect the full amount, plus penalties and interest. If the IRS does not collect in ten years, the remaining balance on the account disappears forever, because the tax statute of limitations has expired. An option you can take for this is to get a partial-pay installment agreement, whereby the payments are low enough that the full amount of tax due will never be paid, and the balance will be forgiven at the end of the 10- year period.

In Michigan, the state generally has 6 years to collect a tax debt. However, unlike the IRS, the statute of limitations for the state is renewed every time the taxpayer reaffirms their debt—either by signing an acknowledgement (required to set up a payment plan or to get non- collectible status,) or by making a voluntary payment.

If you set up an installment agreement with the state and make payments toward that agreement, the tax SOL will never run. This is because it starts over every month when you send in a check—a huge difference between the state and IRS.

Keep in mind, that although the IRS only generally has 10 years to collect a tax, they still have an option of taking proof of the tax deficiency to court and getting a judgment to collect. This will give you 10 years from the date of the judgment to collect. Essentially, turning a 10-year statute of limitations into a 20-year statute. Then again, getting a judgment takes an attorney’s time and costs the government in fees, so the IRS generally only does that in cases where the taxpayer has substantial assets and the IRS feels like they will be able to collect down the road.

Although these guidelines have specific date and time requests, know that these periods referenced are generally speaking. Certain events can extend these statutes of limitations. In order to determine the expiration date of a particular tax assessment, an in- depth review of the IRS or State transcripts needs to happen to determine if anything took place that would have extended this time limit. When it comes to tax statutes of limitations, things can get a little confusing. It’s best to read up and ask questions so that you know what you’re up against when submitting your taxes. For more information on the SOL, and specific laws in Michigan, feel free to give us a call, or send us an e-mail here.

Michigan tax lawyer, Venar R. Ayar, founder of Ayar Law, holds ten years of experience as an accounting specialist and tax lawyer. He earned his Juris Doctor at the University of San Diego School of Law, receiving a Master of Laws in Taxation—the highest degree available in tax. His main focus has become Michigan tax resolution as well as IRS tax resolution, including individual and business tax matters; tax planning, tax compliance and white-collar criminal defense. His business background has helped him to become personable and understanding in his work. Representing clients before the IRS, Ayar’s practice and experience has proved him as an honest and dedicated leader in the realm of Michigan tax lawyers. Click here to contact your Michigan tax lawyer, Venar Ayar.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.

Testimonials

An Honest Law Firm! I had a phone consultation with Ayar Law. Instead of... selling me a solution that would be minimally beneficial, they told me I could approach the IRS myself. She then answered all my question while providing the details of what I needed to do to resolve my IRS problem. At the end of the conversation I was told to feel free to call back if I have any more questions. Thank you! Ayar Law an honest competent Law Firm.read more

Wendy was amazing and very knowledgeable. She was able to answer all my... questions to help me resolve my tax issue on my own. I am very thankful for the advice and time she took to talk to me!!!read more

I own a tax preparation company in Columbus, Ohio. I got a letter of... introduction from Ayar Law in the mail that was very timely - I had a client with a unique tax situation that I really wanted to discuss from a legal perspective. I sent them an email with some pretty specific questions, and was pleasantly surprised to get a very speedy response. The answers were clear, concise, and raised the appropriate follow-up questions. A second email with follow-up questions received a similar response.I will definitely keep Ayar Law in mind for future tax law needs.Arnold Haas, EAread more

I met with Wendy at Ayar Law and she was absolutely outstanding. She... answered all of my questions accurately and clearly so I could easily understand. I would recommend this firm to anyone needing assistance with tax issues.read more

They answered our questions. Explained our course of action. Could have... easily charged us. But being it was just a consultation they would not accept any payment! They laid out a game plan for us. It just put me at ease about our situation. I can not thank them enough.read more

Wendy was very helpful in helping me understand my rights in a complex tax... issue and gave me the proper advice needed before advising me that I did not need to retain her at this time. Very cool to have someone give me the advice I needed and just be honest with me about my position and what the best options were. Super professional and trustworthy.read more

I had a question about a letter from the state of Michigan. I was put... through to Dennis who succinctly explained what I needed to do. He told me to call him back if there were any problems. He was very helpful!read more

I called and I was greeted with there endly staff. They were very kind and... compassionate. They return my phone calls in a timely fashion. I would highly recommend anybody with any types of tax issues to call themread more

I walked into Ayar Law with a concern about our business taxes. I met... with Senior Tax Attorney Wendy and was relieved to learn about our options. She took her time and explained the process. It was much easier than I thought! I highly recommend Ayar Law for all of your tax concerns!read more

This is a wonderful team of highly knowledgeable and dedicated... professionals. They honestly exceeded my expectations. I am VERY HAPPY with the experience I had with Ayar Law and I strongly recommend their services.read more

Very honest and upfront law firm. Not just about taking your money with... false promises. They guided me through the process of what was needed and I was able to do it all on my own! The advice they gave was spot on and helped me resolve my tax issues very quickly.read more

I was impressed. and also surprised. I had an analysis done and was... expecting an upsell on services in the end. This was NOT the case. We didn't even go down that road because it was deemed necessary and not even recommended. I was impressed and Ayar Law changed my opinion about Tax Attorneys. My previous interactions had given me a bad taste for the industry. Thank you and I will recommendread more

I can’t say enough about the integrity of this place. They provided me... the best guidance and option for me after reviewing and explaining all of the options completely. No pressure, friendly and helpful staff!read more

I contacted Ayar Law on behalf of a relative. They were very helpful and... pointed my relative in the right direction. I really appreciate their time, knowledge and willingness to help with the matter discussed. Highly recommended!read more

Dennis and the Ayar team were extremely helpful. When they learned about... our tax problem and our special circumstances, Dennis was very willing to provide education, direction and even sent us forms to complete rather than having us search the web for them. I'd highly recommend Ayar Law and will call them again if needed.read more

Dennis and the Ayar team were extremely helpful. When they learned about... our tax problem and our special circumstances, Dennis was very willing to provide education, direction and even sent us forms to complete rather than having us search the web for them. I'd highly recommend Ayar Law and will call them again if needed.read more

A great team of professionals that will take the time to help you through... all of your needs. CPA also on site that was top notch. The Ayar Law group was knowledgeable with specialized insight that made my tax prep easy. Recommendedread more

When I called for advice earlier today, I was truly impressed as well... shocked by the way the he (Attorney Dennis) and the receptionist handled my call. First off the receptionist is truly the epitome of a true professional receptionist. Secondly, the attorney was very polite, understanding, and very patient with me repeating information for me to finally grasp the jist of all that I needed to know. He never once cut me off to get a point across, he actually listened to everything I expressed to really under the questions I had for the purpose of my call. I must say that I would be more than comfortable and happy to do business with him in the future. God bless you Attorney Dennis Btw, he returned my call with a couple of minutes.read more

I consulted Ayar Law for legal tax advice and could not be happier that I... did. I quickly got the help that I needed and was treated with professionalism and courtesy from everyone I spoke with along the way. Thanks Ayar Law!read more

Choosing Ayar Law was the BEST decision I could have made. I received... nothing but respect and over the top service from this firm at a completely fair rate. Dennis Kent, Venar Ayar and the rest of the staff at the office are superstars. Most importantly, they are great people. Thanks again for your help Venar/Dennis!read more

Wendy made discussing my tax issues as comforting as possible. I came away... feeling like I had a friend who I could call on and trust when it comes to the topic of tax law. I would recommend her to anyone who needs to sit down and just talk about what to do and what not to do. Thank you Wendy!read more

I had a wonderful experience working with Ayar Law to settle my tax debt.... From day one they were very helpful, friendly and understanding. I worked directly with Wendy and I could not have been more pleased! She was always promptly available to answer questions that I had as they arose and was very friendly and understanding of my personal situation. She was a real and approachable person which is something I myself require to feel at ease. This was not the first tax attorney group that I looked at. I am so glad that I chose to work with Ayar law as I could not be happier with the personal interaction, performance and the results that I received. Thank you again so much.read more

Excellent service and extremely helpful. I happened to call when they... were very busy, but they took the time to call me back within 10 minutes to help with my tax questions. I would highly recommend their service and will definitely consider Ayar Law in the future!read more

After a huge tax issue of passport denial by the IRS. Ayar law was... instrumental in solving my issues. I can't say enough about their hard work in getting my issues resolved... Two big thumbs up and 100 % confidence.... Can't say enough to convey my satisfaction... Highly recommend!read more

Very honest and hardworking individual who makes your case feel as if it’s... his own. The professionalism, dedication, and commitment to practice law ethically was evident in his work and demeanor. I recommend him to anyone seeking legal help.read more

I had a great overall experience calling Ayar Law. Call answered promptly... and after giving a little background information I was connected to a tax attorney whom answered my questions clearly. I never felt rushed or pressured in any way to make an appointment of witch I was prepared to do. A very professional and satisfying experience! I would recommend this firm to anybody needing tax attorney services. Thank you Ayar Law Howard Eread more

I am so glad I was referred to Ayar Law and specifically Wendy. She went... beyond my expectations by being kind and understanding. The staff and overall experience has been a positive one. I definitely recommend.read more

They are VERY honest and will tell you the way it is. I received more... information from them in the first phone call than I did from other longer appointments with "experts". If they can't help you in your case, they will actually tell you rather than waste a bunch of your time and money. This is rare, and they definitely stand out.read more

Wendy was honest and very forthcoming wit me, about details and info, she... could of charged me for. She even told me she is willing to offer any advice that can help me along free of charge. This law firm is sent from heaven, as far as im concerned. I give them 5 star class rating.read more

I loved working with that office. They are good at what they do! They are... definitely the pros! Very hard working yet very friendly. You don't see that too often. Never made me feel like I was a burden or too much trouble. I would recommend them to everybody without a doubt in my mind.read more

This is my first contact with Ayar Law. I came away with a positive... impression of this firm. The phone receptionist was friendly and helpful as was the attorney who provided the initial consultation. Wendy gave me clear, concise answers to my questions and outlined a plan for me to follow. I came away from the consultation with the information that I needed. Based on my initial impressions from these contacts I would retain their services if I had the need to do so.read more

Thank you for reviewing my situation and providing clear and concise... advice as to how to proceed with my tax issue. No hype or sales expectations, just intelligent direction. Thank you Wendy.read more

Spoke to Wendy regarding my IRS debit and was so pleased to get honest... down to earth knowledge on procedures and possibilities on how to deal with my situation. I am so thankful to know how to proceed and not have to worry if I'm doing the right things to make my life a little bit easier moving forward. Thank you Wendy!read more

Venar Ayar and his staff were very welcoming and had a lot of information... that could help me solve the issue I was facing. While he could not help me personally, as my matter was not as severe as I thought. I would definitely come back when an issue with my taxes warranted an expert and knowledgeable Tax attorney.read more

I went to Ayar Law and met with the accountant and attorney. They were... very professional and understanding of my complicated tax situation. In my free consultation, they provided me with thoughtful insights, multiple ideas, critical questions that needed to be vocalized, and a better understanding of my situation for the 2018-2019 season! Before going to them, I tried a few other firms, but Ayar Law displayed the deepest knowledge base when it comes to tax filing and tax law.-By far the most knowledgeable and friendly firm I met with.read more

Nothing short of impressed with Mr. Ayar. He met with me. Listened... intently. Reviewed my case carefully. I was surprised when he advised me not to hire him. He went on to explain that it was in my best interest to leave things as they are. Explained in detail his opinion. Professional integrity at its finest. He was smart, direct and honest. What more can you ask? Wouldn’t hesitate to recommend.read more